What is the primary function of benchmarking in BSG?

Benchmarking plays a crucial role in the Business Strategy Game (BSG) by allowing companies to assess their performance in comparison to industry best practices. This comparative analysis helps firms identify gaps in their operations, strategy, and performance metrics. By understanding how they stack up against competitors and the top performers in the industry, companies can make informed decisions to enhance their strategies, improve efficiency, and ultimately elevate their competitive positioning.

Through benchmarking, companies can pinpoint specific areas that require improvement, which might include product quality, production processes, cost management, and customer satisfaction. This strategic tool fosters a culture of continuous improvement and innovation, as it encourages firms to adopt practices that have proven successful for others.

The other options do not capture the essence of benchmarking effectively. Setting internal standards might be part of a broader performance management strategy but does not focus on external comparison. Increasing marketing expenses or establishing workforce diversity targets fall outside the scope of benchmarking's function, which is fundamentally about analysis and comparison rather than specific operational goals or initiatives.